Take control by planting small financial seeds today that will bear returns in the future
Some people believe that you need lots of money to start investing, but just investing R500 monthly can add up to a significant lump sum over time.
I have met people with relatively little who have managed their finances and investments really well.
Low cost investing platforms like makes it possible to invest small amounts of capital and buy portions of a share. You can find out more info on this on their website.
If you commit to a good savings plan and spend less than you earn then you can really grow your money by investing the funds in the Equity market (ie. Buying shares on the local JSE). Doing so can help build wealth over time over the long term.
It’s a simple equation that many people have a difficult time following.
By committing yourself to saving small amounts of money today and investing it on the stock market, you will find that over time it will gradually compound and grow to bear larger sums of money in the future.
When I began working and making money, I never changed my spending habits. I could afford to have bought a new car, yet I purchased a stable and reliable second hand vehicle and used the balance of the money to invest in property, furthering my education and investing in the stock market.
I continued to live as though I was on a tight budget. Along with this rule there are other values I’ve kept to build and grow my wealth slowly.
The first priority was to educate myself. I have always had a love for finance and the stock market in particular so I educated myself on proper investing by doing trading courses and studying Accounting which all investors know is the language of business.
The second priority was to automate my savings plan before I was an experienced trader and investor, so I opened an investment account and had monthly debit orders go off and buy a selection of shares that I wanted to buy and hold for the long term.
You need to know that if you want to make substantial returns by saving and investing you need to understand that your rate of return is the key factor in any investment.
The difference between achieving a 7% return per year and 15% per year is a decade.
It takes 27.5 years to turn R1000 a month into a Million at 7% a year but only 17.5 years at 15% per year.
The long term stock market return on average is between 14% – 16%.
This is based on the market average, on a consistent basis. Half of all listed shares, some small caps especially are doing better than this and better.
Compared to conventional savings if all you want to achieve is the average market return, investing in shares is likely to halve the time it takes you to achieve your financial objectives.
If you assume you could do better than the market average and can achieve 20% per year which is realistic you will find that in 20 years a contribution of just R1000 per month earning 20% per year turns into almost R2.7 million.
Investing R1000 per month earning 16% per year turns into R1.6 million over the 20 years. The seemingly small difference of just 4% means a difference of R1.1 million more in gains at the end of the day.
The point I am making here is to try to make your investments automatic. Learn where to put your money so that you can attain wealth and your goals. The sooner the better.
Set up automatic transfers to a savings account or investment account earning high interest so that you can start effortlessly saving money and get your money to work for you.
If you start taking control of your finances early on and commit to a savings plan you can attain your financial goals.
Some key points I would like to share from my personal experience:
1. Always pay your debt as soon as possible.
It annoys me how many banks or clothing stores try to bait you to get you to sign up for personal loans, a store card or credit card to make it easy for people to get into and hard to get out of debt.
2. Build an emergency fund of at-least 3 to 6 months.
I personally always ensure that I have 6 to 12 months’ salary saved up in an emergency account as a buffer. Not many can do so, so at the minimum try to automate at least 15% of your salary to go into a savings account every month. Think of it as paying yourself first. If 15% sounds like too much then decide on an amount that you can afford that can go into a savings or investment account as soon as you earn it. This way you won’t consider yourself having those funds to waste on unnecessary purchases.
It takes some mental conditioning and sacrifice but once you get into the habit it will become second nature.
3. Invest in the Stock Market.
If you don’t have the skill to buy or sell listed shares in your personal capacity then I recommend platforms like and Satrix that have a variety of investment products and index trackers like cost effective ETF’s (Exchange Traded Funds) and have an automated monthly debit order set up.
Over the long term some ETF’s have provided better than average returns and outperformed other savings vehicles.
The key thing I want to get across is to encourage you to get started as soon as you can and take ownership of your own money. The earlier you start planting the financial seeds the sooner it will bear returns for you in the future. No one should care more about your money than you do.
Happy investing